exhibit_4-4.htm


    
      

    

    EXHIBIT
4.4

    
 

    REGISTRATION
RIGHTS AGREEMENT

     

    REGISTRATION
RIGHTS AGREEMENT (this “Agreement”), dated as of July
31, 2008, by and among Camelot Entertainment Group, Inc., a Delaware Corporation
with its headquarters located at 130 Vantis, Suite 140, Aliso Viejo, CA 92656
(the “Company”), and
each of the undersigned (together with their respective affiliates and any
assignee or transferee of all of their respective rights hereunder, the “Initial
Investors”).

     

    WHEREAS:

     

    A.           In
connection with the Securities Purchase Agreement by and among the parties
hereto of even date herewith (the “Securities Purchase
Agreement”), the Company has agreed, upon the terms and subject to the
conditions contained therein, to issue and sell to the Initial Investors
 secured convertible notes in the aggregate principal amount of up to One
Hundred Sixty Thousand Dollars ($160,000) (the “Notes”) that are convertible
into shares of the Company’s common stock (the “Common Stock”), upon the terms
and subject to the limitations and conditions set forth in such Notes and
 warrants (the “Warrants”) to acquire an
aggregate of 20,000,000 shares of Common Stock, upon the terms and conditions
and subject to the limitations and conditions set forth in the Warrants;
and

     

    B.           To
induce the Initial Investors to execute and deliver the Securities Purchase
Agreement, the Company has agreed to provide certain registration rights under
the Securities Act of 1933, as amended, and the rules and regulations
thereunder, or any similar successor statute (collectively, the “1933 Act”), and applicable
state securities laws;

     

    NOW, THEREFORE, in
consideration of the premises and the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Company and each of the Initial Investors hereby agree
as follows:

     

    1.    DEFINITIONS.

     

    a.           As
used in this Agreement, the following terms shall have the following
meanings:

     

    (i)           “Investors” means the Initial
Investors and any transferee or assignee who agrees to become bound by the
provisions of this Agreement in accordance with Section 9 hereof.

     

    (ii)           “register,” “registered,” and “registration” refer to a
registration effected by preparing and filing a Registration Statement or
Statements in compliance with the 1933 Act and pursuant to Rule 415 under the
1933 Act or any successor rule providing for offering securities on a continuous
basis (“Rule 415”), and
the declaration or ordering of effectiveness of such Registration Statement by
the United States Securities and Exchange Commission (the “SEC”).

     

    (iii)           “Registrable Securities” means
the Conversion Shares issued or issuable upon conversion or otherwise pursuant
to the Notes and Additional Notes (as defined
in the Securities Purchase Agreement) pursuant to a price equal to the lesser
of: (i) the Initial Market Price (as defined in the Notes) and (ii) the average
of the lowest three (3) Trading Prices (as defined in the Notes) for the Common
Stock during the twenty (20) Trading Day period discounted by 50%.

     

     

    
      
        
        

      

      
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    (iv)           “Registration Statement” means
a registration statement of the Company under the 1933 Act.

     

    b.           Capitalized
terms used herein and not otherwise defined herein shall have the respective
meanings set forth in the Securities Purchase Agreement or the Convertible
Note.

     

    2.    REGISTRATION.

     

    a.           Mandatory
Registration.  The Company shall use its best efforts to
prepare, and, on or prior to ten (10) days from the date of receipt of written
demand of the Investors (as defined in the Securities Purchase Agreement) (the
“Filing Date”), file
with the SEC a Registration Statement on Form S-3 (or, if Form S-3 is not then
available, on such form of Registration Statement as is then available to effect
a registration of the Registrable Securities, subject to the consent of the
Initial Investors, which consent will not be unreasonably withheld) covering the
resale of the Registrable Securities underlying the Notes issued or issuable
pursuant to the Securities Purchase Agreement, which Registration Statement, to
the extent allowable under the 1933 Act and the rules and regulations
promulgated thereunder (including Rule 416), shall state that such Registration
Statement also covers such indeterminate number of additional shares of Common
Stock as may become issuable upon conversion of or otherwise pursuant to the
Notes to prevent dilution resulting from stock splits, stock dividends or
similar transactions.  The number of shares of Common Stock initially
included in such Registration Statement shall be no less than an amount equal
the sum of the number of Conversion Shares that are then issuable upon
conversion of the Notes and Additional Notes (based on the Variable Conversion
Price as would then be in effect and assuming the Variable Conversion Price is
the Conversion Price at such time) without regard to any limitation on the
Investor’s ability to convert the Notes.  The Company acknowledges
that the number of shares initially included in the Registration Statement
represents a good faith estimate of the maximum number of shares issuable upon
conversion of the Notes.

     

    b.           Underwritten
Offering.  If any offering pursuant to a Registration Statement
pursuant to Section 2(a) hereof involves an underwritten offering, the Investors
who hold a majority in interest of the Registrable Securities subject to such
underwritten offering, with the consent of a majority-in-interest of the Initial
Investors, shall have the right to select one legal counsel and an investment
banker or bankers and manager or managers to administer the offering, which
investment banker or bankers or manager or managers shall be reasonably
satisfactory to the Company.

     

     

    
      
        
        

      

      
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    c.           Payments
by the Company.  The Company shall use its best efforts to
obtain effectiveness of the Registration Statement as soon as
practicable.  If  the Registration Statement(s) covering the
Registrable Securities required to be filed by the Company pursuant to Section
2(a) hereof is not filed by the Filing Date or the Company does not use its best
efforts and respond to comments from the SEC regarding its Registration
Statement in a
timely manner, or after the Registration Statement has been declared effective
by the SEC, sales of all of the Registrable Securities cannot be made pursuant
to the Registration Statement, or  the Common Stock is not listed or
included for quotation on the Nasdaq National Market (“Nasdaq”), the Nasdaq SmallCap
Market (“Nasdaq
SmallCap”), the New York Stock Exchange (the “NYSE”) or the American Stock
Exchange (the “AMEX”)
after being so listed or included for quotation after the date hereof, or
 the Common Stock ceases to be traded on the Over-the-Counter Bulletin
Board (the “OTCBB”) or
any equivalent replacement exchange prior to being listed or included for
quotation on one of the aforementioned markets, then the Company will make
payments to the Investors in such amounts and at such times as shall be
determined pursuant to this Section 2(c) as partial relief for the damages to
the Investors by reason of any such delay in or reduction of their ability to
sell the Registrable Securities (which remedy shall not be exclusive of any
other remedies available at law or in equity).  The Company shall pay
to each holder of the Notes or Registrable Securities an amount equal to the
then outstanding principal amount of the Notes (and, in the case of holders of
Registrable Securities, the principal amount of Notes from which such
Registrable Securities were converted) (“Outstanding Principal
Amount”), multiplied by the Applicable Percentage (as defined below)
times the sum of:  (i) the number of months (prorated for partial
months) after the Filing Date and prior to the date the Registration Statement
is declared effective by the SEC, provided, however, that there shall be
excluded from such period any delays which are solely attributable to changes
required by the Investors in the Registration Statement with respect to
information relating to the Investors, including, without limitation, changes to
the plan of distribution, or to the failure of the Investors to conduct their
review of the Registration Statement pursuant to Section 3(h) below in a
reasonably prompt manner; (ii) the number of months (prorated for partial
months) that sales of all of the Registrable Securities cannot be made pursuant
to the Registration Statement after the Registration Statement has been declared
effective (including, without limitation, when sales cannot be made by reason of
the Company’s failure to properly supplement or amend the prospectus included
therein in accordance with the terms of this Agreement, but excluding any days
during an Allowed Delay (as defined in Section 3(f)); and (iii) the number of
months (prorated for partial months) that the Common Stock is not listed or
included for quotation on the OTCBB, Nasdaq, Nasdaq SmallCap, NYSE or AMEX or
that trading thereon is halted after the Registration Statement has been
declared effective.  The term “Applicable Percentage” means
two hundredths (.02).  (For example, if the Registration Statement
becomes effective one (1) month after the determination that the Company has not
used its best efforts to respond to comments from the SEC regarding its
Registration Statement in a timely manner, the Company would pay $5,000 for each
$250,000 of Outstanding Principal Amount.  If thereafter, sales could
not be made pursuant to the Registration Statement for an additional period of
one (1) month, the Company would pay an additional $5,000 for each $250,000 of
Outstanding Principal Amount.)  Such amounts shall be paid in cash or,
at the Company’s option, in shares of Common Stock priced at the Conversion
Price (as defined in the Notes) on such payment date.

     

     

    
      
        
        

      

      
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    d.           Piggy-Back
Registrations.  Subject to the last sentence of this Section
2(d), if at any time prior to the expiration of the Registration Period (as
hereinafter defined) the Company shall determine to file with the SEC a
Registration Statement relating to an offering for its own account or the
account of others under the 1933 Act of any of its equity securities (other than
on Form S-1, Form S-4 or Form S-8 or their then equivalents relating to equity
securities to be issued solely in connection with any acquisition of any entity
or business or equity
securities issuable in connection with stock option or other bona fide, employee
benefit plans), the Company shall send to each Investor who is entitled to
registration rights under this Section 2(d) written notice of such determination
and, if within fifteen (15) days after the effective date of such notice, such
Investor shall so request in writing, the Company shall include in such
Registration Statement all or any part of the Registrable Securities such
Investor requests to be registered, except that if, in connection with any
underwritten public offering for the account of the Company the managing
underwriter(s) thereof shall impose a limitation on the number of shares of
Common Stock which may be included in the Registration Statement because, in
such underwriter(s)’ judgment, marketing or other factors dictate such
limitation is necessary to facilitate public distribution, then the Company
shall be obligated to include in such Registration Statement only such limited
portion of the Registrable Securities with respect to which such Investor has
requested inclusion hereunder as the underwriter shall permit. Any exclusion of
Registrable Securities shall be made pro rata among the Investors seeking to
include Registrable Securities in proportion to the number of Registrable
Securities sought to be included by such Investors; provided, however, that the
Company shall not exclude any Registrable Securities unless the Company has
first excluded all outstanding securities, the holders of which are not entitled
to inclusion of such securities in such Registration Statement or are not
entitled to pro rata inclusion with the Registrable Securities; and provided, further, however, that, after
giving effect to the immediately preceding proviso, any exclusion of Registrable
Securities shall be made pro rata with holders of other securities having the
right to include such securities in the Registration Statement other than
holders of securities entitled to inclusion of their securities in such
Registration Statement by reason of demand registration rights.  No
right to registration of Registrable Securities under this Section 2(d) shall be
construed to limit any registration required under Section 2(a)
hereof.  If an offering in connection with which an Investor is
entitled to registration under this Section 2(d) is an underwritten offering,
then each Investor whose Registrable Securities are included in such
Registration Statement shall, unless otherwise agreed by the Company, offer and
sell such Registrable Securities in an underwritten offering using the same
underwriter or underwriters and, subject to the provisions of this Agreement, on
the same terms and conditions as other shares of Common Stock included in such
underwritten offering.  Notwithstanding anything to the contrary set
forth herein, the registration rights of the Investors pursuant to this Section
2(d) shall only be available in the event the Company fails to timely file,
obtain effectiveness or maintain effectiveness of any Registration Statement to
be filed pursuant to Section 2(a) in accordance with the terms of this
Agreement.

     

    e.           Demand
Registrations.  The Company shall use it best efforts to
prepare, and, on or prior to ten (10) days from the date of receipt of written
demand (the “Investor
Demand”) of the Investors (the “Filing Date”), to file with
the SEC a Registration Statement on Form S-3 (or, if Form S-3 is not then
available, on such form of Registration Statement as is then available to effect
a registration of any shares issued or issuable in respect of interest on the
Notes in accordance with the terms thereof, which Registration Statement, to the
extent allowable under the 1933 Act and the rules and regulations promulgated
thereunder (including Rule 416), shall state that such Registration Statement
also covers such indeterminate number of additional shares of Common Stock as
may become issuable upon conversion of or otherwise pursuant to the Notes to
prevent dilution resulting from stock splits, stock dividends or similar
transactions.  The number of shares of Common Stock initially included
in such Registration Statement shall be no less than an amount equal to the sum
of the number of Conversion
Shares that are then issuable upon conversion of the interest on the Notes
(based on the Variable Conversion Price as would then be in effect and assuming
the Variable Conversion Price is the Conversion Price at such time), without
regard to any limitation on the Investor’s ability to convert the interest on
the Notes.  The Company acknowledges that the number of shares
initially included in the Registration Statement represents a good faith
estimate of the maximum number of shares issuable upon conversion of the
interest on the Notes.

     

     

    
      
        
        

      

      
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    f.           Eligibility
for Form S-3 or S-1; Conversion to Form S-3.  The Company
represents and warrants that it meets the requirements for the use of Form S-3
or S-1 for registration of the sale by the Initial Investors and any other
Investors of the Registrable Securities.   The Company agrees to
file all reports required to be filed by the Company with the SEC in a timely
manner so as to remain eligible or become eligible, as the case may be, and
thereafter to maintain its eligibility, for the use of Form S-3.  If
the Company is not currently eligible to use Form S-3, not later than five (5)
business days after the Company first meets the registration eligibility and
transaction requirements for the use of Form S-3 (or any successor form) for
registration of the offer and sale by the Initial Investors and any other
Investors of Registrable Securities, the Company shall file a Registration
Statement on Form S-3 (or such successor form) with respect to the Registrable
Securities covered by the Registration Statement on Form S-1, filed pursuant to
Section 2(a) (and include in such Registration Statement on Form S-3 the
information required by Rule 429 under the 1933 Act) or convert the Registration
Statement on Form S-1, filed pursuant to Section 2(a) to a Form S-3 pursuant to
Rule 429 under the 1933 Act and use its best efforts to cause such Registration
Statement (or such amendment) to be declared effective no later than thirty (30)
days after filing.  In the event of a breach by the Company of the
provisions of this Section 2(f), the Company will be required to make payments
pursuant to Section 2(c) hereof.

     

    3.    OBLIGATIONS OF THE
COMPANY.

     

    In
connection with the registration of the Registrable Securities, the Company
shall have the following obligations:

     

    a.           Upon
demand as provided for in Section 2(a), the Company shall prepare promptly, and
file with the SEC not later than the Filing Date, a Registration Statement with
respect to the number of Registrable Securities provided in Section 2(a), and
thereafter use its best efforts to cause such Registration Statement relating to
Registrable Securities to become effective as soon as possible after such filing
(within ninety (90)days from the date of Investor Demand), and keep the
Registration Statement effective pursuant to Rule 415 at all times until such
date as is the earlier of (i) the date on which all of the Registrable
Securities have been sold and (ii) the date on which the Registrable Securities
(in the opinion of counsel to the Initial Investors) may be immediately sold to
the public without registration or restriction (including, without limitation,
as to volume by each holder thereof) under the 1933 Act (the “Registration Period”), which
Registration Statement (including any amendments or supplements thereto and
prospectuses contained therein) shall not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein, or
necessary to make the statements therein not misleading.

     

    


    
      
        
           


        

        
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    b.           The
Company shall prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to the Registration Statements and
the prospectus used in connection with the Registration Statements as may be
necessary to keep the Registration Statements effective at all times during the
Registration Period, and, during such period, comply with the provisions of the
1933 Act with respect to the disposition of all Registrable Securities of the
Company covered by the Registration Statements until such time as all of such
Registrable Securities have been disposed of in accordance with the intended
methods of disposition by the seller or sellers thereof as set forth in the
Registration Statements.  In the event the number of shares available
under a Registration Statement filed pursuant to this Agreement is insufficient
to cover all of the Registrable Securities issued or issuable upon conversion of
the Notes, the Company shall amend the Registration Statement, or file a new
Registration Statement (on the short form available therefor, if applicable), or
both, so as to cover all of the Registrable Securities, in each case, as soon as
practicable, but in any event within fifteen (15) days after the necessity
therefor arises (based on the market price of the Common Stock and other
relevant factors on which the Company reasonably elects to rely).  The
Company shall use its best efforts to cause such amendment and/or new
Registration Statement to become effective as soon as practicable following the
filing thereof, but in any event within thirty (30) days after the date on which
the Company reasonably first determines (or reasonably should have determined)
the need therefor.  The provisions of Section 2(c) above shall be
applicable with respect to such obligation, with the ninety (90) days running
from the day the Company reasonably first determines (or reasonably should have
determined) the need therefor.

     

    c.           The
Company shall furnish to each Investor whose Registrable Securities are included
in a Registration Statement and its legal counsel  promptly (but in no
event more than two (2) business days) after the same is prepared and publicly
distributed, filed with the SEC, or received by the Company, one copy of each
Registration Statement and any amendment thereto, each preliminary prospectus
and prospectus and each amendment or supplement thereto, and, in the case of the
Registration Statement referred to in Section 2(a), each letter written by or on
behalf of the Company to the SEC or the staff of the SEC, and each item of
correspondence from the SEC or the staff of the SEC, in each case relating to
such Registration Statement (other than any portion of any thereof which
contains information for which the Company has sought confidential treatment),
and  promptly (but in no event more than two (2) business days) after the
Registration Statement is declared effective by the SEC, such number of copies
of a prospectus, including a preliminary prospectus, and all amendments and
supplements thereto and such other documents as such Investor may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by such Investor.  The Company will immediately notify each
Investor by facsimile of the effectiveness of each Registration Statement or any
post-effective amendment.  The Company will promptly respond to any
and all comments received from the SEC (which comments shall promptly be made
available to the Investors upon request), with a view towards causing each
Registration Statement or any amendment thereto to be declared effective by the
SEC as soon as practicable, shall promptly file an acceleration request as soon
as practicable (but in no event more than two (2) business days) following the
resolution or clearance of all SEC comments or, if applicable, following
notification by the SEC that any such Registration Statement or any amendment
thereto will not be subject to review and shall, if required by SEC Rules,
promptly file with the SEC a final prospectus as soon as practicable (but in no
event more than two (2) business days) following receipt by the Company from the
SEC of an order declaring the Registration Statement effective.

     

    


    
      
        
           


        

        
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    In the
event of a breach by the Company of the provisions of this Section 3(c), the
Company will be required to make payments pursuant to Section 2(c)
hereof.

     

    d.           The
Company shall use reasonable efforts to  register and qualify the
Registrable Securities covered by the Registration Statements under such other
securities or “blue sky” laws of such jurisdictions in the United States as the
Investors who hold a majority in interest of the Registrable Securities being
offered reasonably request,  prepare and file in those jurisdictions such
amendments (including post-effective amendments) and supplements to such
registrations and qualifications as may be necessary to maintain the
effectiveness thereof during the Registration Period,  take such other
actions as may be necessary to maintain such registrations and qualifications in
effect at all times during the Registration Period, and  take all other
actions reasonably necessary or advisable to qualify the Registrable Securities
for sale in such jurisdictions; provided, however, that the
Company shall not be required in connection therewith or as a condition thereto
to  qualify to do business in any jurisdiction where it would not otherwise
be required to qualify but for this Section 3(d),  subject itself to
general taxation in any such jurisdiction,  file a general consent to
service of process in any such jurisdiction,  provide any undertakings that
cause the Company undue expense or burden, or  make any change in its
charter or bylaws, which in each case the Board of Directors of the Company
determines to be contrary to the best interests of the Company and its
shareholders.

     

    e.           In
the event Investors who hold a majority-in-interest of the Registrable
Securities being offered in the offering (with the approval of a
majority-in-interest of the Initial Investors) select underwriters for the
offering, the Company shall enter into and perform its obligations under an
underwriting agreement, in usual and customary form, including, without
limitation, customary indemnification and contribution obligations, with the
underwriters of such offering.

     

    f.           As
promptly as practicable after becoming aware of such event, the Company shall
notify each Investor of the happening of any event, of which the Company has
knowledge, as a result of which the prospectus included in any Registration
Statement, as then in effect, includes an untrue statement of a material fact or
omission to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, and use its best efforts promptly to
prepare a supplement or amendment to any Registration Statement to correct such
untrue statement or omission, and deliver such number of copies of such
supplement or amendment to each Investor as such Investor may reasonably
request; provided that, for not more than ten (10) consecutive trading days (or
a total of not more than twenty (20) trading days in any twelve (12) month
period), the Company may delay the disclosure of material non-public information
concerning the Company (as well as prospectus or Registration Statement
updating) the disclosure of which at the time is not, in the good faith opinion
of the Company, in the best interests of the Company (an “Allowed Delay”); provided,
further, that the Company shall promptly  notify the Investors in writing
of the existence of (but in no event, without the prior written consent of an
Investor, shall the Company disclose to such investor any of the facts or
circumstances regarding) material non-public information giving rise to an
Allowed Delay and  advise the Investors in writing to cease all sales under
such Registration Statement until the end of the Allowed Delay. Upon expiration
of the Allowed Delay, the Company shall again be bound by the first sentence of
this Section 3(f) with respect to the information giving rise
thereto.

     

    


    
      
        
           


        

        
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    g.           The
Company shall use its best efforts to prevent the issuance of any stop order or
other suspension of effectiveness of any Registration Statement, and, if such an
order is issued, to obtain the withdrawal of such order at the earliest possible
moment and to notify each Investor who holds Registrable Securities being sold
(or, in the event of an underwritten offering, the managing underwriters) of the
issuance of such order and the resolution thereof.

     

    h.           The
Company shall permit a single firm of counsel designated by the Initial
Investors to review such Registration Statement and all amendments and
supplements thereto (as well as all requests for acceleration or effectiveness
thereof) a reasonable period of time prior to their filing with the SEC, and not
file any document in a form to which such counsel reasonably objects and will
not request acceleration of such Registration Statement without prior notice to
such counsel.  The sections of such Registration Statement covering
information with respect to the Investors, the Investor’s beneficial ownership
of securities of the Company or the Investors intended method of disposition of
Registrable Securities shall conform to the information provided to the Company
by each of the Investors.

     

    i.           Upon
request, the Company shall make generally available to its security holders as
soon as practicable, but not later than ninety (90) days after the close of the
period covered thereby, an earnings statement (in form complying with the
provisions of Rule 158 under the 1933 Act) covering a twelve-month period
beginning not later than the first day of the Company’s fiscal quarter next
following the effective date of the Registration Statement.

     

    j.           At
the request of any Investor, the Company shall furnish, on the date that
Registrable Securities are delivered to an underwriter, if any, for sale in
connection with any Registration Statement or, if such securities are not being
sold by an underwriter, on the date of effectiveness thereof  an opinion,
dated as of such date, from counsel representing the Company for purposes of
such Registration Statement, in form, scope and substance as is customarily
given in an underwritten public offering, addressed to the underwriters, if any,
and the Investors and  a letter, dated such date, from the Company’s
independent certified public accountants in form and substance as is customarily
given by independent certified public accountants to underwriters in an
underwritten public offering, addressed to the underwriters, if any, and the
Investors.

     

    k.           The
Company shall make available for inspection by  any Investor,  any
underwriter participating in any disposition pursuant to a Registration
Statement,  one firm of attorneys and one firm of accountants or other
agents retained by the Initial Investors,  one firm of attorneys and one
firm of accountants or other agents retained by all other Investors, and
 one firm of attorneys retained by all such underwriters (collectively, the
“Inspectors”) all
pertinent financial and other records, and pertinent corporate documents and
properties of the Company, including without limitation, records of conversions
by other holders of convertible securities issued by the Company and the
issuance of stock to such holders pursuant to the conversions (collectively, the
“Records”), as shall be
reasonably deemed necessary by each Inspector to enable each Inspector to
exercise its due diligence responsibility, and cause the Company’s officers,
directors and employees to supply all information which any Inspector may
reasonably request for purposes of such due diligence; provided, however, that each
Inspector shall hold in confidence and shall not make any disclosure (except to
an Investor) of any Record or other information which the Company determines in
good faith to be confidential, and of which
determination the Inspectors are so notified, unless  the disclosure of
such Records is necessary to avoid or correct a misstatement or omission in any
Registration Statement,  the release of such Records is ordered pursuant to
a subpoena or other order from a court or government body of competent
jurisdiction, or  the information in such Records has been made generally
available to the public other than by disclosure in violation of this or any
other agreement.  The Company shall not be required to disclose any
confidential information in such Records to any Inspector until and unless such
Inspector shall have entered into confidentiality agreements (in form and
substance satisfactory to the Company) with the Company with respect thereto,
substantially in the form of this Section 3(k).  Each Investor agrees
that it shall, upon learning that disclosure of such Records is sought in or by
a court or governmental body of competent jurisdiction or through other means,
give prompt notice to the Company and allow the Company, at its expense, to
undertake appropriate action to prevent disclosure of, or to obtain a protective
order for, the Records deemed confidential.  Nothing herein (or in any
other confidentiality agreement between the Company and any Investor) shall be
deemed to limit the Investor’s ability to sell Registrable Securities in a
manner which is otherwise consistent with applicable laws and
regulations.

     

     

    
      
        
        

      

      
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    l.           The
Company shall hold in confidence and not make any disclosure of information
concerning an Investor provided to the Company unless  disclosure of such
information is necessary to comply with federal or state securities laws,
 the disclosure of such information is necessary to avoid or correct a
misstatement or omission in any Registration Statement,  the release of
such information is ordered pursuant to a subpoena or other order from a court
or governmental body of competent jurisdiction, or  such information has
been made generally available to the public other than by disclosure in
violation of this or any other agreement.  The Company agrees that it
shall, upon learning that disclosure of such information concerning an Investor
is sought in or by a court or governmental body of competent jurisdiction or
through other means, give prompt notice to such Investor prior to making such
disclosure, and allow the Investor, at its expense, to undertake appropriate
action to prevent disclosure of, or to obtain a protective order for, such
information.

     

    m.           The
Company shall  cause all the Registrable Securities covered by the
Registration Statement to be listed on each national securities exchange on
which securities of the same class or series issued by the Company are then
listed, if any, if the listing of such Registrable Securities is then permitted
under the rules of such exchange, or  to the extent the securities of the
same class or series are not then listed on a national securities exchange,
secure the designation and quotation, of all the Registrable Securities covered
by the Registration Statement on Nasdaq or, if not eligible for Nasdaq, on
Nasdaq SmallCap or, if not eligible for Nasdaq or Nasdaq SmallCap, on the OTCBB
and, without limiting the generality of the foregoing, to arrange for at least
two market makers to register with the Financial Industry Regulatory Authority
(“FINRA”) as such with
respect to such Registrable Securities.

     

    n.           The
Company shall provide a transfer agent and registrar, which may be a single
entity, for the Registrable Securities not later than the effective date of the
Registration Statement.

     

    o.           The
Company shall cooperate with the Investors who hold Registrable Securities being
offered and the managing underwriter or underwriters, if any, to facilitate the
timely preparation and delivery of certificates (not bearing any restrictive
legends) representing
Registrable Securities to be offered pursuant to a Registration Statement and
enable such certificates to be in such denominations or amounts, as the case may
be, as the managing underwriter or underwriters, if any, or the Investors may
reasonably request and registered in such names as the managing underwriter or
underwriters, if any, or the Investors may request, and, within three (3)
business days after a Registration Statement which includes Registrable
Securities is ordered effective by the SEC, the Company shall deliver, and shall
cause legal counsel selected by the Company to deliver, to the transfer agent
for the Registrable Securities (with copies to the Investors whose Registrable
Securities are included in such Registration Statement) an instruction in the
form attached hereto as Exhibit
1 and an opinion of such counsel in the form attached hereto as Exhibit 2.

     

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    p.           At
the request of the holders of a majority-in-interest of the Registrable
Securities, the Company shall prepare and file with the SEC such amendments
(including post-effective amendments) and supplements to a Registration
Statement and any prospectus used in connection with the Registration Statement
as may be necessary in order to change the plan of distribution set forth in
such Registration Statement.

     

    q.           From
and after the date of this Agreement, the Company shall not, and shall not agree
to, allow the holders of any securities of the Company to include any of their
securities, in excess of 250,000 shares of Common Stock, in any Registration
Statement under Section 2(a) hereof or any amendment or supplement thereto under
Section 3(b) hereof without the consent of the holders of a majority-in-interest
of the Registrable Securities.

     

    r.           The
Company shall take all other reasonable actions necessary to expedite and
facilitate disposition by the Investors of Registrable Securities pursuant to a
Registration Statement.

     

    4.    OBLIGATIONS OF THE
INVESTORS.

     

    In
connection with the registration of the Registrable Securities, the Investors
shall have the following obligations:

     

    a.           It
shall be a condition precedent to the obligations of the Company to complete the
registration pursuant to this Agreement with respect to the Registrable
Securities of a particular Investor that such Investor shall furnish to the
Company such information regarding itself, the Registrable Securities held by it
and the intended method of disposition of the Registrable Securities held by it
as shall be reasonably required to effect the registration of such Registrable
Securities and shall execute such documents in connection with such registration
as the Company may reasonably request.  At least three (3) business
days prior to the first anticipated filing date of the Registration Statement,
the Company shall notify each Investor of the information the Company requires
from each such Investor.

     

    b.           Each
Investor, by such Investor’s acceptance of the Registrable Securities, agrees to
cooperate with the Company as reasonably requested by the Company in connection
with the preparation and filing of the Registration Statements hereunder, unless
such Investor has notified the Company in writing of such Investor’s election to
exclude all of such Investor’s Registrable Securities from the Registration
Statements.

     

    


    
      
        
           


        

        
          10

          
            

          

        

        
           


        

      

    

    


    c.           In
the event Investors holding a majority-in-interest of the Registrable Securities
being registered (with the approval of the Initial Investors) determine to
engage the services of an underwriter, each Investor agrees to enter into and
perform such Investor’s obligations under an underwriting agreement, in usual
and customary form, including, without limitation, customary indemnification and
contribution obligations, with the managing underwriter of such offering and
take such other actions as are reasonably required in order to expedite or
facilitate the disposition of the Registrable Securities, unless such Investor
has notified the Company in writing of such Investor’s election to exclude all
of such Investor’s Registrable Securities from such Registration
Statement.

     

    d.           Each
Investor agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 3(f) or 3(g), such
Investor will immediately discontinue disposition of Registrable Securities
pursuant to the Registration Statement covering such Registrable Securities
until such Investor’s receipt of the copies of the supplemented or amended
prospectus contemplated by Section 3(f) or 3(g) and, if so directed by the
Company, such Investor shall deliver to the Company (at the expense of the
Company) or destroy (and deliver to the Company a certificate of destruction)
all copies in such Investor’s possession, of the prospectus covering such
Registrable Securities current at the time of receipt of such
notice.

     

    e.           No
Investor may participate in any underwritten registration hereunder unless such
Investor  agrees to sell such Investor’s Registrable Securities on the
basis provided in any underwriting arrangements in usual and customary form
entered into by the Company,  completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
reasonably required under the terms of such underwriting arrangements, and
 agrees to pay its pro rata share of all underwriting discounts and
commissions and any expenses in excess of those payable by the Company pursuant
to Section 5 below.

     

    5.    EXPENSES OF
REGISTRATION.

     

    All
reasonable expenses, other than underwriting discounts and commissions, incurred
in connection with registrations, filings or qualifications pursuant to Sections
2 and 3, including, without limitation, all registration, listing and
qualification fees, printers and accounting fees, the fees and disbursements of
counsel for the Company, and the reasonable fees and disbursements of one
counsel selected by the Initial Investors pursuant to Sections 2(b) and 3(h)
hereof shall be borne by the Company and shall be included in the fees paid to
counsel under the Securities Purchase Agreement for purposes of counsel selected
by the Initial Investors.

     

    6.    INDEMNIFICATION.

     

    In the
event any Registrable Securities are included in a Registration Statement under
this Agreement:

     

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    a.           To
the extent permitted by law, the Company will indemnify, hold harmless and
defend  each Investor who holds such Registrable Securities,  the
directors, officers, partners, employees, agents and each person who controls
any Investor within the meaning of the 1933 Act or the Securities Exchange Act
of 1934, as amended (the “1934
Act”), if any,
 any underwriter (as defined in the 1933 Act) for the Investors, and
 the directors, officers, partners, employees and each person who controls
any such underwriter within the meaning of the 1933 Act or the 1934 Act, if any
(each, an “Indemnified
Person”), against any joint or several losses, claims, damages,
liabilities or expenses (collectively, together with actions, proceedings or
inquiries by any regulatory or self-regulatory organization, whether commenced
or threatened, in respect thereof, “Claims”) to which any of them
may become subject insofar as such Claims arise out of or are based upon: (i)
any untrue statement or alleged untrue statement of a material fact in a
Registration Statement or the omission or alleged omission to state therein a
material fact required to be stated or necessary to make the statements therein
not misleading; (ii) any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus if used prior to the
effective date of such Registration Statement, or contained in the final
prospectus (as amended or supplemented, if the Company files any amendment
thereof or supplement thereto with the SEC) or the omission or alleged omission
to state therein any material fact necessary to make the statements made
therein, in light of the circumstances under which the statements therein were
made, not misleading; or (iii) any violation or alleged violation by the Company
of the 1933 Act, the 1934 Act, any other law, including, without limitation, any
state securities law, or any rule or regulation thereunder relating to the offer
or sale of the Registrable Securities (the matters in the foregoing clauses (i)
through (iii) being, collectively, “Violations”).  Subject
to the restrictions set forth in Section 6(c) with respect to the number of
legal counsel, the Company shall reimburse the Indemnified Person, promptly as
such expenses are incurred and are due and payable, for any reasonable legal
fees or other reasonable expenses incurred by them in connection with
investigating or defending any such Claim.  Notwithstanding anything
to the contrary contained herein, the indemnification agreement contained in
this Section 6(a): (i) shall not apply to a Claim arising out of or based upon a
Violation which occurs in reliance upon and in conformity with information
furnished in writing to the Company by any Indemnified Person or underwriter for
such Indemnified Person expressly for use in connection with the preparation of
such Registration Statement or any such amendment thereof or supplement thereto,
if such prospectus was timely made available by the Company pursuant to Section
3(c) hereof; (ii) shall not apply to amounts paid in settlement of any Claim if
such settlement is effected without the prior written consent of the Company,
which consent shall not be unreasonably withheld; and (iii) with respect to any
preliminary prospectus, shall not inure to the benefit of any Indemnified Person
if the untrue statement or omission of material fact contained in the
preliminary prospectus was corrected on a timely basis in the prospectus, as
then amended or supplemented, such corrected prospectus was timely made
available by the Company pursuant to Section 3(c) hereof, and the Indemnified
Person was promptly advised in writing not to use the incorrect prospectus prior
to the use giving rise to a Violation and such Indemnified Person,
notwithstanding such advice, used it.  Such indemnity shall remain in
full force and effect regardless of any investigation made by or on behalf of
the Indemnified Person and shall survive the transfer of the Registrable
Securities by the Investors pursuant to Section 9.

     

     

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    b.           In
connection with any Registration Statement in which an Investor is
participating, each such Investor agrees severally and not jointly to indemnify,
hold harmless and defend, to the same extent and in the same manner set forth in
Section 6(a), the Company, each of its directors, each of its officers who signs
the Registration Statement, each person, if any, who controls the Company within
the meaning of the 1933 Act or the 1934 Act, any underwriter and any other
shareholder selling securities pursuant to the Registration Statement
or any of its directors or officers or any person who controls such shareholder
or underwriter within the meaning of the 1933 Act or the 1934 Act (collectively
and together with an Indemnified Person, an “Indemnified Party”), against
any Claim to which any of them may become subject, under the 1933 Act, the 1934
Act or otherwise, insofar as such Claim arises out of or is based upon any
Violation by such Investor, in each case to the extent (and only to the extent)
that such Violation occurs in reliance upon and in conformity with written
information furnished to the Company by such Investor expressly for use in
connection with such Registration Statement; and subject to Section 6(c) such
Investor will reimburse any legal or other expenses (promptly as such expenses
are incurred and are due and payable) reasonably incurred by them in connection
with investigating or defending any such Claim; provided, however, that the
indemnity agreement contained in this Section 6(b) shall not apply to amounts
paid in settlement of any Claim if such settlement is effected without the prior
written consent of such Investor, which consent shall not be unreasonably
withheld; provided, further, however, that the
Investor shall be liable under this Agreement (including this Section 6(b) and
Section 7) for only that amount as does not exceed the net proceeds to such
Investor as a result of the sale of Registrable Securities pursuant to such
Registration Statement.  Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of such Indemnified
Party and shall survive the transfer of the Registrable Securities by the
Investors pursuant to Section 9. Notwithstanding anything to the contrary
contained herein, the indemnification agreement contained in this Section 6(b)
with respect to any preliminary prospectus shall not inure to the benefit of any
Indemnified Party if the untrue statement or omission of material fact contained
in the preliminary prospectus was corrected on a timely basis in the prospectus,
as then amended or supplemented.

     

    c.           Promptly
after receipt by an Indemnified Person or Indemnified Party under this Section 6
of notice of the commencement of any action (including any governmental action),
such Indemnified Person or Indemnified Party shall, if a Claim in respect
thereof is to be made against any indemnifying party under this Section 6,
deliver to the indemnifying party a written notice of the commencement thereof,
and the indemnifying party shall have the right to participate in, and, to the
extent the indemnifying party so desires, jointly with any other indemnifying
party similarly noticed, to assume control of the defense thereof with counsel
mutually satisfactory to the indemnifying party and the Indemnified Person or
the Indemnified Party, as the case may be; provided, however, that an
Indemnified Person or Indemnified Party shall have the right to retain its own
counsel with the fees and expenses to be paid by the indemnifying party, if, in
the reasonable opinion of counsel retained by the indemnifying party, the
representation by such counsel of the Indemnified Person or Indemnified Party
and the indemnifying party would be inappropriate due to actual or potential
differing interests between such Indemnified Person or Indemnified Party and any
other party represented by such counsel in such proceeding.  The
indemnifying party shall pay for only one separate legal counsel
for  the Indemnified Persons or the Indemnified Parties, as
applicable, and such legal counsel shall be selected by Investors holding a
majority-in-interest of the  Registrable Securities included in the
Registration Statement to which the Claim relates (with the approval of a
majority-in-interest of the Initial Investors), if the Investors are entitled to
indemnification hereunder, or the Company, if the Company is entitled to
indemnification hereunder, as applicable.  The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action shall not relieve such indemnifying party of any
liability to the Indemnified Person or Indemnified Party under this Section 6,
except to the extent that the
indemnifying party is actually prejudiced in its ability to defend such
action.  The indemnification required by this Section 6 shall be made
by periodic payments of the amount thereof during the course of the
investigation or defense, as such expense, loss, damage or liability is incurred
and is due and payable.

     

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    7.    CONTRIBUTION.

     

    To the
extent any indemnification by an indemnifying party is prohibited or limited by
law, the indemnifying party agrees to make the maximum contribution with respect
to any amounts for which it would otherwise be liable under Section 6 to the
fullest extent permitted by law; provided, however, that
 no contribution shall be made under circumstances where the maker would
not have been liable for indemnification under the fault standards set forth in
Section 6,  no seller of Registrable Securities guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be
entitled to contribution from any seller of Registrable Securities who was not
guilty of such fraudulent misrepresentation, and contribution (together with any
indemnification or other obligations under this Agreement) by any seller of
Registrable Securities shall be limited in amount to the net amount of proceeds
received by such seller from the sale of such Registrable
Securities.

     

    8.    REPORTS UNDER THE 1934
ACT.

     

    With a
view to making available to the Investors the benefits of Rule 144 promulgated
under the 1933 Act or any other similar rule or regulation of the SEC that may
at any time permit the investors to sell securities of the Company to the public
without registration (“Rule
144”), the Company agrees to:

     

    a.           make
and keep public information available, as those terms are understood and defined
in Rule 144;

     

    b.           file
with the SEC in a timely manner all reports and other documents required of the
Company under the 1933 Act and the 1934 Act so long as the Company remains
subject to such requirements (it being understood that nothing herein shall
limit the Company’s obligations under Section 4(c) of the Securities Purchase
Agreement) and the filing of such reports and other documents is required for
the applicable provisions of Rule 144; and

     

    c.           furnish
to each Investor so long as such Investor owns Registrable Securities, promptly
upon request,  a written statement by the Company that it has complied with
the reporting requirements of Rule 144, the 1933 Act and the 1934 Act,  a
copy of the most recent annual or quarterly report of the Company and such other
reports and documents so filed by the Company, and  such other information
as may be reasonably requested to permit the Investors to sell such securities
pursuant to Rule 144 without registration.

     

    9.    ASSIGNMENT OF REGISTRATION
RIGHTS.

     

    The
rights under this Agreement shall be automatically assignable by the Investors
to any transferee of all or any portion of Registrable Securities if:
(i) the Investor agrees in writing with the transferee or assignee to
assign such rights, and a copy of such agreement is furnished to the
Company
within a reasonable time after such assignment, (ii) the Company is, within
a reasonable time after such transfer or assignment, furnished with written
notice of  the name and address of such transferee or assignee, and
 the securities with respect to which such registration rights are being
transferred or assigned, (iii) following such transfer or assignment, the
further disposition of such securities by the transferee or assignee is
restricted under the 1933 Act and applicable state securities laws, (iv) at or
before the time the Company receives the written notice contemplated by clause
(ii) of this sentence, the transferee or assignee agrees in writing with the
Company to be bound by all of the provisions contained herein, (v) such transfer
shall have been made in accordance with the applicable requirements of the
Securities Purchase Agreement, and (vi) such transferee shall be an “accredited investor” as that
term defined in Rule 501 of Regulation D promulgated under the 1933
Act.

     

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    10.    AMENDMENT OF REGISTRATION
RIGHTS.

     

    Provisions
of this Agreement may be amended and the observance thereof may be waived
(either generally or in a particular instance and either retroactively or
prospectively), only with written consent of the Company, each of the Initial
Investors (to the extent such Initial Investor still owns Registrable
Securities) and Investors who hold a majority interest of the Registrable
Securities.  Any amendment or waiver effected in accordance with this
Section 10 shall be binding upon each Investor and the Company.

     

    11.    MISCELLANEOUS.

     

    a.           A
person or entity is deemed to be a holder of Registrable Securities whenever
such person or entity owns of record such Registrable Securities.  If
the Company receives conflicting instructions, notices or elections from two or
more persons or entities with respect to the same Registrable Securities, the
Company shall act upon the basis of instructions, notice or election received
from the registered owner of such Registrable Securities.

     

    b.           Any
notices required or permitted to be given under the terms hereof shall be sent
by certified or registered mail (return receipt requested) or delivered
personally or by courier (including a recognized overnight delivery service) or
by facsimile and shall be effective five days after being placed in the mail, if
mailed by regular United States mail, or upon receipt, if delivered personally
or by courier (including a recognized overnight delivery service) or by
facsimile, in each case addressed to a party.  The addresses for such
communications shall be:

     

    If to the
Company:

     

    Camelot
Entertainment Group, Inc.

    130
Vantis, Suite 140,

    Aliso
Viejo, CA 92656

    Attention:
Robert P. Atwell

    Telephone:
(949) 334-2950

    Facsimile:  (949)
334-2951

    


    
      
        
           


        

        
          15

          
            

          

        

        
           


        

      

    

    


    


    With a
copy to:

     

    Astor
Weiss Kaplan & Mandel, LLP

    The
Bellevue, 6th Floor

    200 South
Broad Street

    Philadelphia,
PA  19102

    Attention:
Christopher P. Flannery

    Telephone:
(215) 893-4594

    Facsimile:  (215)
400-2222

    


     

    If to an
Investor: to the address set forth immediately below such Investor’s name on the
signature pages to the Securities Purchase Agreement.

     

    With a
copy to:

     

    Ballard
Spahr Andrews & Ingersoll, LLP

    1735
Market Street

    51st
Floor

    Philadelphia,
Pennsylvania  19103

    Attention:  Gerald
J. Guarcini, Esq.

    Telephone:  215-865-8625

    Facsimile:   215-864-8999

    


     

    c.           Failure
of any party to exercise any right or remedy under this Agreement or otherwise,
or delay by a party in exercising such right or remedy, shall not operate as a
waiver thereof.

     

    d.           
THIS AGREEMENT SHALL BE ENFORCED, GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES OF
CONFLICT OF LAWS.  THE PARTIES HERETO HEREBY SUBMIT TO THE EXCLUSIVE
JURISDICTION OF THE UNITED STATES FEDERAL COURTS LOCATED NEW YORK, NEW YORK WITH
RESPECT TO ANY DISPUTE ARISING UNDER THIS AGREEMENT, THE AGREEMENTS ENTERED INTO
IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. BOTH
PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF SUCH SUIT OR PROCEEDING.  BOTH PARTIES FURTHER AGREE
THAT SERVICE OF PROCESS UPON A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED
IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR
PROCEEDING.  NOTHING HEREIN SHALL AFFECT EITHER PARTY’S RIGHT TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.  BOTH PARTIES AGREE THAT
A FINAL NON-APPEALABLE JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON SUCH JUDGMENT
OR IN ANY
OTHER LAWFUL MANNER.  THE PARTY WHICH DOES NOT PREVAIL IN ANY DISPUTE
ARISING UNDER THIS AGREEMENT SHALL BE RESPONSIBLE FOR ALL FEES AND EXPENSES,
INCLUDING ATTORNEYS’ FEES, INCURRED BY THE PREVAILING PARTY IN CONNECTION WITH
SUCH DISPUTE.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    e.           In
the event that any provision of this Agreement is invalid or unenforceable under
any applicable statute or rule of law, then such provision shall be deemed
inoperative to the extent that it may conflict therewith and shall be deemed
modified to conform with such statute or rule of law.  Any provision
hereof which may prove invalid or unenforceable under any law shall not affect
the validity or enforceability of any other provision hereof.

     

    f.           This
Agreement, the Notes and the Securities Purchase Agreement (including all
schedules and exhibits thereto) constitute the entire agreement among the
parties hereto with respect to the subject matter hereof and
thereof.  There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein and
therein.  This Agreement and the Securities Purchase Agreement
supersede all prior agreements and understandings among the parties hereto with
respect to the specific financing subject matter hereof and
thereof.

     

    g.           Subject
to the requirements of Section 9 hereof, this Agreement shall be binding upon
and inure to the benefit of the parties and their successors and
assigns.

     

    h.           The
headings in this Agreement are for convenience of reference only and shall not
form part of, or affect the interpretation of, this Agreement.

     

    i.           This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original but all of which shall constitute one and the same agreement
and shall become effective when counterparts have been signed by each party and
delivered to the other party.  This Agreement, once executed by a
party, may be delivered to the other party hereto by facsimile transmission of a
copy of this Agreement bearing the signature of the party so delivering this
Agreement.

     

    j.           Each
party shall do and perform, or cause to be done and performed, all such further
acts and things, and shall execute and deliver all such other agreements,
certificates, instruments and documents, as the other party may reasonably
request in order to carry out the intent and accomplish the purposes of this
Agreement and the consummation of the transactions contemplated
hereby.

     

    k.           Except
as otherwise provided herein, all consents and other determinations to be made
by the Investors pursuant to this Agreement shall be made by Investors holding a
majority of the Registrable Securities, determined as if the all of the Notes
then outstanding have been converted into for Registrable
Securities.

     

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    l.           The
Company acknowledges that a breach by it of its obligations hereunder will cause
irreparable harm to each Investor by vitiating the intent and purpose of the
transactions contemplated hereby.  Accordingly, the Company
acknowledges that the remedy at law for breach of its obligations under this
Agreement will be inadequate and agrees, in the event of a breach or threatened
breach by the Company of any of the provisions under this Agreement,
that each
Investor shall be entitled, in addition to all other available remedies in law
or in equity, and in addition to the penalties assessable herein,  to
an injunction or injunctions restraining, preventing or curing any breach of
this Agreement and to enforce specifically the terms and provisions hereof,
without the necessity of showing economic loss and without any bond or other
security being required.

     

    m.           The
language used in this Agreement will be deemed to be the language chosen by the
parties to express their mutual intent, and no rules of strict construction will
be applied against any party.

     

    


     

    


     

    


     

    


     

    


     

    


     

    


     

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          18

          
            

          

        

        
           


        

      

    

    


    IN WITNESS WHEREOF, the
Company and the undersigned Initial Investors have caused this Agreement to be
duly executed as of the date first above written.

     

     

    CAMELOT
ENTERTAINMENT GROUP, INC.

     

    
      
        	 	 	 	 	 
	
                /s/ 
      Robert P. Atwell

              	 	 	
                 

              	 
	
                Robert
      P. Atwell

              	 	 	
                 

              	 
	
                Chief
      Executive Officer

              	 	 	
                 

              	 


      

    

     

     

     

    NEW
MILLENNIUM CAPITAL PARTNERS II, LLC

    By:  First
Street Manager II, LLC

     

    
      
        	 	 	 	 	 
	
                /s/ 
      Corey S. Ribotsky

              	 	 	
                 

              	 
	
                Corey
      S. Ribotsky

              	 	 	
                 

              	 
	
                Manager

              	 	 	
                 

              	 


      

    

     

     

     

     

    
      19